Volkswagen considers new EV sub-label in China

VW takes another step towards establishing a new local sub-brand for electric cars in China. German media reports the new label would incorporate the lines of the ID family, which Chinese customers have met with only moderate enthusiasm. Yet, VW already has a model in mind.

The new Volkswagen China brand shall convey more lifestyle and appeal to a younger audience, writes Automobilwoche. This is in line with what Cupra is to do in Europe. Accordingly, the first model of the new label to launch in China will be the Cupra Tavascan, which VW showed a few days ago.

The Cupra is to be made in China anyway. However, until now, the output in Anhui was reportedly slated exclusively for export, but it seems these plans have changed. The Tavascan will now be offered in China, not as Cupra but under the new label that has yet to be named. “In China, it will run under a different brand,” Automobilwoche quotes a high-ranking manager.

Why Volkswagen is not launching Cupra in China mainly for practical reasons. “Setting up a completely new brand there is far too costly,” a company manager told Automobilwoche. “We won’t do that.” Besides, Volkswagen has had bad experiences with Škoda and the China start-up Jetta. Both are languishing below one per cent market share, and Škoda is likely to pull out of the country altogether soon, writes Automobilwoche. Instead, VW prefers launching a sub-label to the established Volkswagen brand.

The report does not say precisely what the new sub-brand will be called. However, how strongly the new label will or will not be perceived as VW by Chinese customers will likely be decisive. Nio and BYD, for example, are mentioned as role models – BYD, in particular, took the top sales position in China from Wolfsburg in the first quarter.

As for the Tavascan’s appeal, it is the most powerful MEB model to date and the company’s first all-electric SUV coupé. The all-important connectivity in China may be served by the model’s infotainment touchscreen that measures 15 inches diagonally, “the largest so far in a Cupra model,” writes VW. The current MEB models must make do with ten- or twelve-inch screens. Still, the infotainment system mainly originates from the ID.7, and whether it is enough to wow Chinese customers remains to be seen.

Volkswagen in China, for China

The Cupra Tavascan will reportedly be manufactured at Volkswagen Group’s Anhui plant in China, also for global markets. The company hopes to sell more than 70,000 vehicles per year.

Following the completion of the Anting (SAIC VW) and Foshan (FAW-VW) plants, Anhui is the group’s third production facility for pure electric vehicles in the country. In contrast to the two previous MEB plants in China, VW is calling the shots there, acquiring a 75 per cent majority stake in the joint venture with JAC and renaming the company from JAC Volkswagen to Volkswagen Anhui. In the other two joint ventures, the Chinese partners still hold at least 50 per cent.

Overall, Anhui as location appears to be taking on a more central role in Volkswagen’s latest “in China, for China” strategy, as Ralf Brandstätter, Group Board Member for China, called it when announcing a new local R&D venture ‘100%TechCo’ in April. “By consistently bundling development and procurement capacities and integrating local suppliers at an early stage, we will significantly accelerate our development pace.”

The project, also called a “new company”, is to combine vehicle and component development and procurement when launching in 2024. Volkswagen expects the new unit to bring the German corporation in closer step with Chinese customers by integrating “state-of-the-art technologies from local suppliers,” among other things.

“In a first step, 100%TechCo will steer the development of the models of the Volkswagen Anhui joint venture based on the MEB platform and will be responsible for the development of China-specific platform requirements and modules with a focus on electric mobility,” said Marcus Hafkemeyer, the new CEO of 100%TechCo.

When announcing the new company, Volkswagen expected it to play a significant role in developing a future Volkswagen brand model to launch in 2024.

automobilwoche.de (in German)